Governor Scott Walker (R-WI) is proposing a budget that would fund a variety of right-wing priorities by slashing support for public services and local communities, according to an outline of the plan given in Walker’s “State of the State” address Wednesday night. Walker, who had already cut taxes significantly in his first term, proposed an additional $630 million in cuts (about half of which come from income taxes):

With this in mind, I am pleased to announce an income tax cut of $343 million. You, the hardworking taxpayers of this state helped to create the budget surplus, so it is only right that we put more money back into your hands. Over the next decade, this will lower income taxes $1.7 billion…Overall, our budget includes more than $630 million in tax cuts.

Walker touted the tax cuts as a way to boost Wisconsin’s economy, but they give relatively little money back to middle-class families, limiting their stimulative effect. A four-person family with a total yearly income of $80,000 would only see an extra $8 per month under Walker’s plans. But even tax cuts with limited effects cost the government money — $1.7 billion over the next decade, according to Walker. And while he says it will be paid for a projected surplus, that’s the same thing former President George W. Bush said about his budget busting tax cuts.

Moreover, Walker’s budget proposes several dangerous changes and cuts to critical public services that could hurt the economy. Despite the fact that “a decade of research has shown no academic benefit from sending students to voucher schools,” Walker proposes a significant expansion of voucher funding, which will come at the expense of public schools. He also plans to freeze state financial support for municipal and city level programs. A similar move in Ohio caused problems for localities when it came to funding fire and police departments.

Walker also doubled down on his refusal to accept Obamacare Medicaid support, a move too irresponsible even for Florida’s hard-right Governor Rick Scott. Walker’s proposed budget also contains provisions requiring “non-elderly, able-bodied adults” on food stamps to attend job training programs in order to get food support.

The banks involved in last year’s foreclosure abuse settlement are spending more money to get bad loans off of their books than they are on directly reducing the amount homeowners owe on their mortgages, according to a new report from the settlement’s overseer released Thursday.

Five large banks reached a $25 billion settlement with the federal government and state attorneys general in 2012, and though their efforts to help homeowners improved at the end of 2012, much of the money they have spent has been aimed at short sales that help homeowners get away from underwater mortgages but also help the banks get bad loans off their books, Bloomberg reports:

Bank of America Corp., JPMorgan Chase & Co. (JPM), and three other banks in last year’s $25 billion foreclosure-abuse settlement spent $19.5 billion through the end of 2012 approving so-called short sales that let homeowners sell for less than they owe on their mortgages, Joseph Smith, the settlement’s monitor, said today. By comparison, the banks spent $6 billion reducing borrowers’ principal to help them stay in their homes, an increase from $2.6 billion at the end of the third quarter.

While the banks are stepping up efforts to help borrowers stay in their homes, they are still spending most of the settlement on short sales and forgiveness of home-equity loans that allow them to take bad loans off their books. Profits from new lending are increasing even as regulators enforce penalties for modification missteps and foreclosures pursued with fraudulent or missing documents. Last year, mortgage revenue at the four largest lenders — Bank of America, JPMorgan, Wells Fargo & Co. (WFC), and U.S. Bancorp –surpassed the amount they spent on consumer settlements and investor demands they buy back faulty loans.

The five banks have spent a total of $45.8 billion as part of the settlement, according to the report from Joseph Smith, the settlement’s monitor. Because they do not receive dollar-for-dollar credit for money spent, they have not yet fulfilled terms of the settlement, which required them to provide $20 billion in mortgage relief. Only Ally Financial has completed its obligation.

Focusing on short sales isn’t a recent development under terms of the mortgage settlement, which has been riddled with problems over the last year. States diverted much of the money they received under the settlement to closing budget gaps, and many homeowners — particularly those hardest hit by the housing crisis — have yet to see relief. Because of the reliance on short sales, banks are “spending more to move people out of their homes than to keep people in them,” the Campaign for a Fair Settlement said in a statement earlier this month.

European austerity has already proven a terrible failure, driving the continent as a whole back into a recession and pushing unemployment to record levels. Despite promises from leaders across Europe that reducing deficits would spur growth, that hasn’t been the case. And worse yet, the focus on austerity hasn’t even led to the deficit reduction many European countries are chasing.

The United Kingdom has fallen far short of its deficit reduction goals, and France is likely to miss its deficit reduction targets too. Today, Fitch ratings announced that Spain too had missed its target, and it will miss its 2013 target thanks to a lack of economic growth:

Though European deficits are declining, they are doing so far more slowly than projected thanks to a lack of economic growth that has made much of the deficit reduction policies counterproductive. European countries continue to cut spending to reduce deficits, causing more fiscal contraction that in turn slows down deficit reduction efforts or, worse, makes deficits larger. When the United Kingdom, which has the economy most comparable to America’s, instituted its first round of austerity in 2010, it projected its deficit would fall from 4.8 percent of GDP to just 1.9 percent. Instead, the country is on the brink of a third recession and its deficit stands at 4.3 percent of its economy. In other deficit-focused countries, unemployment has skyrocketed — Spain’s unemployment rate topped 25 percent in January.

The United States originally approached economic recovery by focusing on stimulus instead of deficit reduction, a path that led to a stronger recovery than Europe’s. But it too has since embraced deficit reduction, the most serious round of which looms on March 1 when sequestration will begin taking effect. Those spending cuts could knock 0.6 percent off of annual economic growth while costing the nation 700,000 jobs. Drops in federal spending have already hurt the recovery, and if Europe is any indication, efforts to rapidly reduce the deficit will likely serve only to reduce growth and complicate deficit reduction efforts instead.

Wells Fargo is the latest bank to ramp up new forms of risky trading in advance of the Volcker Rule, a regulation included in the 2010 Dodd-Frank Wall Street Reform Act meant to make banks safer by prohibiting certain types of trades that helped trigger the global financial crisis in 2009. The rule bans proprietary trading, in which banks bet their own money for the sole purpose of turning large profits, at financial institutions that have the backing of taxpayers.

While some banks have done away with such trading, Wells Fargo is increasing it by relying solely on its own funds to invest in private equity markets, a practice known as “merchant banking” that will likely be allowed by the finalized Volcker Rule. That sort of banking, however, may turn out to be even more dangerous than the prop trading the Volcker Rule prohibits, Reuters reports:

Their decisions may run counter to rulemakers’ efforts to make the financial system safer. The merchant banking that Wells Fargo is embracing is riskier than investing in private equity funds with outside investors, where a bank shares any losses with others. Some critics warn that the Volcker Rule is banning the safer of the two activities, and allowing the one that could lead to bigger losses for a bank.

Some argue that banks should be blocked from any form of private equity investing. Sheila Bair, the former chairman of the Federal Deposit Insurance Corp, which guarantees the deposits of banks like Wells Fargo, said private equity and merchant banking are too far removed from regular banking.

“Is that really what you want institutions that have safety net support doing? Is that an appropriate use for a government backstop?” she told Reuters.

Wells Fargo’s quest for profits even through risky means is yet another indication that many Wall Street banks, undeterred by the financial collapse, are seeking any loophole they can find to continue raking in huge profits regardless of the potential cost. In January, Bloomberg reported that Goldman Sachs had set up a secret hedge fund-like entity meant to skirt the Volcker Rule, and banks have been fighting to weaken the rule since before Dodd-Frank became law. Those efforts have continued since, even in the face of the stunning JP Morgan Chase trading loss that prompted Senate Democrats to call for the closure of massive loophole that exists in the draft version of the rule.

Former bank executives, however, have made the case that a strong Volcker Rule is “necessary to correct a mistake that poses a major risk to our economy.” And while a forceful Volcker Rule would indeed make large banks less profitable, it would do so in a way that would also ensure that they pose less of a risk to the health of the American economy.

You probably don’t have as much control over your cell phone as you think: Thanks to a bizarre enforcement of the Digital Millennium Copyright Act that bars “circumventing digital locks“, consumers don’t have the right to unlock a phone they paid for — but a We The People petition that just passed the 100,000 signature response threshold asks the Obama administration to help fix this glaring consumer choice issue.

The petition provides a good summary of the situation:

The Librarian of Congress decided in October 2012 that unlocking of cell phones would be removed from the exceptions to the DMCA.

As of January 26, consumers will no longer be able unlock their phones for use on a different network without carrier permission, even after their contract has expired.

Consumers will be forced to pay exorbitant roaming fees to make calls while traveling abroad. It reduces consumer choice, and decreases the resale value of devices that consumers have paid for in full.

The Librarian noted that carriers are offering more unlocked phones at present, but the great majority of phones sold are still locked.

We ask that the White House ask the Librarian of Congress to rescind this decision, and failing that, champion a bill that makes unlocking permanently legal.

As the petition notes, the heart of the issue is what rights consumers have over a product they own and if the Librarian’s decision protects the profits of big name wireless carriers at the expense of those rights. The Librarian’s office has sided with consumers before on this issue: It granted exemptions for unlocking phones in 2006 and 2010, but following the implementation of the new decision consumers could face up to $2,500 per unlocked phone in a civil suit and $500,000 or five years in prison in a criminal case where the unlocking is done for “commercial advantage” if carriers take the unlocker to court and win.

Despite the popularity of the petition, there is a jurisdictional dispute as noted by Jon Healey at the Los Angeles Times: “The Library of Congress is a legislative branch agency, not one subject to presidential oversight” and “the law provides no avenue for appealing the librarian’s decisions.” And with the President’s legislative plate already filled to the brim with immigration reform and the looming sequester, it seems unlikely the administration will expend political capital on this issue — even if the situation does effect the 85 percent of Americans who own mobile phones.

President Obama renewed his push for infrastructure investments Wednesday, issuing a plan the White House said would help repair the nation’s ailing roads and bridges while creating jobs and boosting the economy.

The plan calls for $50 billion in new spending, $40 billion of which would be devoted to “the most urgent upgrades” to roads, bridges, and highways that need repairs. According to a White House release, the investments would bring nearly 80 percent of the nation’s 70,000 structurally deficient roads and bridges up to date:

The President’s plan for $50 billion in frontloaded transportation infrastructure investment would direct $40 billion towards reducing the backlog of deferred maintenance on highways, bridges, transit systems, and airports nationwide. For example, the President’s proposed investments could bring almost 80 percent of structurally deficient bridges up to date, getting Americans home faster and making the flow of commerce speedier.

The proposal is more modest than other Obama plans that have been blocked by Republicans in Congress, though the $50 billion fund is similar to a portion of the American Jobs Act. That plan, blocked by Republicans in 2011, also included other infrastructure investments and proposals to help the economy, and it would have created more than a million jobs and boosted economic growth by nearly two percent, according to economic estimates. The Congressional Progressive Caucus also called for infrastructure investments in its plan to avert the automatic spending cuts that will begin taking effect March 1.

Recent studies have shown that investing in infrastructure provides major boosts to the economy, and some estimates suggest that the United States would need nearly $2 trillion in investments to bring existing infrastructure up to date. Without major investments, even larger than those Obama called for, the country could lose $3 trillion in gross domestic product and 3.5 million jobs, according to a January report from the American Society of Civil Engineers.